Hot Stove Contracts: Incorporating Time Value of Money into MLB Free Agent Analysis

For nearly a century, owners of U.S. professional sports teams have lobbied respective governmental bodies for public subsidies to build stadiums and arenas across the country, using franchise relocation as leverage. Myriad justifications have been used as a defense for the public subsidization of this private enterprise, ranging from the economic impact of capital intensive projects to the psychic regional benefit of being a host city to a professional sports franchise. But do these justifications hold up under increased scrutiny? In this case, students are placed in the position of the Mayor of Oakland as she is faced with a dilemma regarding publicly subsidizing a new Raiders stadium. Students will examine the issue through the lens of multiple key stakeholders, and will ultimately have to decide whether the city should utilize public funds to keep the Davis family happy and the Raiders in Oakland, or withhold funding for public good and risk the franchise relocating elsewhere.

Mega sporting events typically justify their use of public funds through pre-event estimates of economic impact. Super Bowl 50, hosted in the San Francisco Bay Area in 2016, took a different approach. The Host Committee intended to redefine how a Super Bowl is hosted, by making SB50 the most giving, shared, and participatory Super Bowl ever. This case follows Host Committee chairman Daniel Lurie’s attempt to evaluate the economic and social impact after the event, presenting a wide range of data and perceptions from both event proponents and detractors. Together, students will estimate financial gains and cost, net economic impact, and evaluate social impacts. Ultimately, students are forced to critically analyze the degree to which economic and social impacts can be compared and contrasted, leading to a manager’s assessment of the overall benefit or cost to a host city.

Following the NCAA’s ruling to allow college athletes to be compensated for their name, image, and likeness (NIL), the marketing team at LEARFIELD, a premier multi-media rights partner for intercollegiate athletics, is hard at work to expand its leadership in (NIL) initiatives to best serve school and brand partners. The company has witnessed drastic changes in college athletics in the past five years and closely monitors the changes in student-athlete compensation as college athletes began earning money for their name, image, and likeness. LEARFIELD’s college business partners still retain control of their brand assets but now student athletes are free to engage in many activities that were once prohibited and on their own terms. While this has created a new frontier for young athletes, schools and businesses must consider how best to coordinate schools, brands, and student-athletes in a way that benefits all parties. The company must ensure that its services are holistic and consider all partners as it serves a variety of stakeholders: universities, conferences, brands, student-athletes, and the collegiate sports industry. Student-athlete NIL creates a new opportunity/division for LEARFIELD.

With over $57B spent globally on corporate sponsorship in 2015, marketers continue to leverage the pervasive power of sports and entertainment to address targeted business objectives. In North America, beverage companies have long been at the forefront of brand sponsorship, tapping into both the equity of sports teams and purchasing power of high-traffic stadia to drive B2C and B2B value. This case examines one of the most powerful rivalries in all of sports from the lens of a regional water brand, Poland Spring®. Provided with a real-world set of objectives, marketing assets, and sales promotion tactics, students are challenged to activate the Red Sox v. Yankees regional rivalry across a variety of touchpoints. Focusing on the primary objective of driving retail sales, students will construct creative, realistic, and on budget sales promotion campaigns that leverage, insights explored within the case study.